The neoconservatives have promoted an aggressive U.S.
foreign policy that they term "benevolent global
hegemony." In other words, they demand, to
paraphrase Pat Buchanan, "an empire, not a republic."

What
makes the American Empire an unprecedented historical
phenomenon—the one instance in which the creed of
American Exceptionalism holds true—is that the U.S.
government, unlike previous imperial powers, seeks to
acquire and maintain an empire from which it derives no
economic benefits. In fact, not only is our pursuit of
world empire shredding the Constitution (as well as
countless lives), it is bankrupting the country.

By
the end of 2005, the national debt had grown to $8.1
trillion, or 64.7 percent of GDP. That is nearly six
times the amount of currency in circulation. Forty-four
percent of that debt was held by foreigners. Of that, 64
percent was held by central banks. Since September 30,
2005, the debt has been increasing at the rate of
approximately two billion dollars per day. On a per
capita basis, it has now reached $28,000. What has been
the response of Congress? Reduce spending? Increase
taxes? No. In March 2006, it raised the legal debt
ceiling to nine trillion dollars to allow for even more
government borrowing.

As a
result of the ballooning deficit, the value of U.S. net
external liabilities, expressed at historical cost,
jumped to $5.1 trillion in 2005 from $4.3 trillion in
2004. As a percentage of GDP, net external liabilities
climbed to 41% in 2005 from 37% in the previous year and
4.9% in 1980.

The Office of Management and Budget reports that the
U.S. federal budget for fiscal year 2007 is $2.251
trillion. Of this amount, $1.102 trillion—49 percent—is
allocated to the military. The breakdown is as follows:
current military, $563 billion; past military (veterans`
benefits and financing past wars through loans, savings
bonds, etc.), $439 billion; and the wars in Iraq and
Afghanistan, an estimated $100 billion. (In
The Economic Costs of the Iraq War: An Appraisal Three
Years After the Beginning of the Conflict,
however,
Joseph E. Stiglitz
of
Columbia University and Linda Bilmes of Harvard project
that the true cost of the Iraq war alone will exceed one
trillion dollars.)

If
the debt and deficit are not reduced, which is unlikely,
since President Bush has asserted that his "War on
Terror" will continue into the foreseeable future,
the financial practices of the U.S. government may
appear to many investors, particularly foreign
investors, as a Ponzi scheme. If that perception takes
hold, the currency will weaken as foreigners fearing an
economic crisis become less willing to invest in U.S.
dollars. To continue to attract foreign investment, the
Federal Reserve would then have to raise interest rates,
perhaps significantly, which could provoke a major
recession.

War is one tactic employed by the neocons in their quest
for global empire; trade is another. And their
"free-trade" policy is hollowing out the U.S.
economy, which is already suffering from 25 years of
deindustrialization as companies relocate their plants
to Mexico and (then) Asia, outsourcing U.S. jobs
overseas. It is the greatest transfer of wealth in
history— from America to Asia.

If
current trends continue, Forrester Research, an
information-technology consulting firm, expects the
number of U.S. jobs outsourced to jump from 400,000 in
2004 to 3.3 million per year by 2015. And it is not just
manufacturing and service jobs that are being
outsourced. Technology-related jobs, such as
"software development, customer service, accounting,
back-office support, product development and other white
collar endeavors," are
also being sent overseas. According to a study by
the
University of California, Berkeley, approximately 14
million Americans working as "financial analysts,
medical technicians, paralegals, and computer and math
professionals could reasonably be considered `at risk`"
for having their jobs outsourced, while Deloitte
Consulting anticipates that three quarters of America`s
leading financial institutions will eventually outsource
their jobs, with India a prime destination.

Over half of the Fortune 500 companies are already
outsourcing jobs. These include American Express, Chase,
Dell, Delta Airlines, Hewlett-Packard, HSBC, J.P.
Morgan, and Oracle. And, according to a CNET News.com
and Harris Interactive poll, over 40 percent of U.S.
technology executives are willing to pay higher taxes to
prevent the U.S. government from prohibiting
outsourcing. Outsourcing is too profitable to U.S.
companies for them to allow it to be terminated, no
matter how damaging it is to U.S. workers. As former
U.S. Trade Representative Charlene Barshefsky
remarked, "We used to think that displaced
workers, given new training, could move up the value
chain. There is now a question about whether that upward
movement will be possible."

The profitability of outsourcing is principally derived
from differences in salaries and regulations. First,
companies often pay foreign workers a fraction of the
American wage. For instance, in 2002, the U.S. salary
for a software programmer was $66,100; in India, it was
$10,000. A mechanical engineer in the United States
earned $55,600; in India, $5,900. Here, an IT manager
received $55,000; there, $8,500. An accountant earned
$41,000 in America, but only $5,000 in India. And
financial operations paid $37,625 in the United States,
but only $5,500 in India.

Thus, many U.S. businesses benefit from the American
Empire, even though the government and citizens of the
United States do not. But what about
India, an aspiring world power, a junior partner in
the U.S. War on Terror, and a beneficiary of U.S.
outsourcing?

India sees an alliance with the United States as a way to
advance her national interests, including recognition as
a nuclear power. New Delhi speaks of a "strategic
partnership" with Washington, as reflected in the
"New Framework for the US-India Defense Relationship"
and the "US-India Global Democracy Initiative" to
"promote stability, democracy, prosperity and peace
throughout the world." In return for this
cooperation, Washington plans "to help India become a
major world power in the 21st century," to serve as
a counterweight to China.

Integral to this "strategic partnership" is the
establishment of a CEO forum of Indian and American
business leaders to promote trade and investment in
India, which includes promoting the outsourcing of U.S.
jobs to India. In its desire to benefit financially from
America`s empire, the Indian government is blind to
domestic repercussions.

India
is a land of two extremes locked in a timeless cold war
that is now turning hot: the rich, literate,
"progressive" urban centers versus the poor,
illiterate, "traditional" countryside. The former
hold political and economic power, but they are
outnumbered, surrounded, infiltrated, and, ultimately,
at the mercy of the latter should they revolt.

In
the 1970`s, this environment produced Maoists—called
Naxalites after the city of their origin, Naxalbari
in West Bengal—who sought a "people`s war" of the
countryside against the cities. The initial insurgency
failed; outsourcing, however, has brought it back to
life with a vengeance.

In
conjunction with New Delhi`s policy of economic
liberalization, outsourcing has generated tremendous
economic growth in India. With a GDP growth rate
exceeding eight percent in 2005, and anticipated to
continue apace for the near future, India is the
second-fastest growing major economy in the world.

This growth, however, has amplified the disparity in
incomes and expectations within cities, between the
cities and the countryside, and among the regions. For
instance, the disparity in growth rates between what are
termed the forward and the backward Indian states rose
from 0.3 percent to 3.3 percent. And 106 million people,
roughly ten percent of the population, are unemployed.
Seventy-five percent live in the countryside.
Corruption, disaffection, and alienation have set in.

As
a result, within 18 months, the Naxalite insurgency
extended its sphere of influence from 76 districts in
nine states in 2003 to 156 districts in 13 states by
2005—one quarter of India`s territory.

The
"Red Corridor" they established linking their
"liberated zones" in India with Maoist-controlled
territory in Nepal is being expanded into a north-south
and east-west corridor spanning all of India. According
to Ranjit Kumar Gupta, a former police commissioner of
Kolkata who fought Naxalites in the 1970`s, a
coordinated attack from the Red Corridor could break the
country in half, leading to Naxalite
"control over huge deposits of minerals, oils, and
industrialised territory." The question now is
not "if" but "when" it will occur.

There is irony in all this—ex-Trotskyites, American
neocons, promoting international capitalism; the
flourishing of international capitalism in India
fostering the growth of the ultraleftist Naxalites. And
there is tragedy. The empire cannot be sustained. Like
the god
Cronus, it devours its children. It is bankrupting
the United States and unraveling India. The former is
facing economic implosion; the latter, social explosion.